WellCare Health Plans Inc. shares rose to the highest intraday price in almost eight years after the company was picked to provide coverage in Iowa’s Medicaid program.
The stock jumped 7.7 percent to $96.65 at 10:45 a.m. in New York. It rose to as much as $97.58 earlier in the day, the highest level since October 2007.
Iowa’s Department of Human Services said Monday that Tampa, Florida-based WellCare was one of four private insurers picked to help provide coverage for the poor and disabled in the state. Each insurer in the program will probably get annual premiums of about $900 million to $950 million, according to Peter Costa, an analyst at Wells Fargo & Co.
“The Iowa contract award is an encouraging sign for WellCare given its enhanced focus on organic growth,” Costa wrote in a research note late Monday.
Units of Anthem Inc. and UnitedHealth Group Inc. will also provide Medicaid coverage in Iowa. Anthem rose 1.3 percent to $153.91, and UnitedHealth added 1.7 percent to $125.97. Closely held AmeriHealth Caritas was also selected by Iowa.